Forex reserve hits record $46b

Bangladesh's foreign exchange reserve yesterday hit a record high of $46 billion thanks to the upward trend of remittance.

The reserves, one of the major macroeconomic indicators of an economy, went up 23.6 per cent in the last one year to stand at $36.03 billion as of June last year, according to data from the central bank.

"A strong inflow of remittance has largely helped the country build up its foreign exchange reserve," said an official of Bangladesh Bank.

The Bangladeshi diaspora sent remittances worth $22.83 billion in the first 11 months of this fiscal year, which is much higher than the total inflow of last year, when they sent $18.20 billion.

On top of that, expatriate Bangladeshis sent $1.75 billion in the first 28 days of this month in contrast to $1.65 billion during the same period a year ago.

A central bank official said the country's foreign exchange reserve had started to maintain an upward trend since the second quarter of last year.

The "hundi system" -- an illegal cross boundary financial transaction -- has faced a major disruption due to the strict restrictions on movement in different countries in order to contain the coronavirus pandemic.

Against this backdrop, the Bangladeshi diaspora opted for formal channels to send their hard-earned money back home, putting a positive impact on remittances to a large extent.  

The foreign exchange reserve had earlier set a new record of $45.1 billion on May 3.

Remittance has played a vital role in boosting foreign exchange reserves amid the ongoing economic hardship caused by the coronavirus pandemic.

Bangladesh Bank yesterday also increased the size of its Export Development Fund to $6 billion from $5.50 billion riding on the healthy foreign exchange reserve.